Champagne to flow again as workers taste strike success

Champagne has been flowing again in copious quantities in London and New York as bankers enjoy a return to the good old days of runaway millionaire bonuses on the back of one-way bets. But that flow of lovely bubbly has been under threat by a strike by employees of Veuve Clicquot, Moët & Chandon, Krug, Ruinart and Mercier over a share of profits.

These past three weeks have seen stoppages at factories in Reims and Epernay that have cut production by 40%, according to the CGT union. The strike involved downing tools for one hour per day, spread over stoppages in blocks of twenty minutes.

The issue at stake has been the decision by the owners-luxury brand company LVMH to slash the employees’ profit share by a fifth, despite ‘flourishing” trade, reports L’Humanite newspaper.

Indeed LVMH’s 2013 results have been described as ‘excellent’ by CEO Bernard Arnault, one of France’s and Europe’s richest men. Operating income has exceeded euros six billion for the first time. ‘All our brands have proven to be exceptionally dynamic. Looking beyond the appeal of our brands, it is the talent of our teams and their motivation,’ he stated in January.

It was precisely the product of this success, and a fairer distribution of it, that the CGT had in mind when it began the campaign.

The management cited a 10 million euro increase in marketing costs to justify its plan. But the union notes that personnel costs represent only 9% of the price of a bottle – 136.6 million of which were exported from the Champagne region in 2013, with Britain – and no doubt the City above all – the number one market, even ahead of the US.

Ninety eight 98 % of the employees joined the stoppages, according to the CGT.

Last week the company reached agreement with the union and it was accepted by a majority of employees.

Each worker will receive a payout of 150 euros in holiday vouchers, a 150 euro cheque from the employer paid into a company-backed staff savings plan, and an annual salary increase of 1.5%, against the current proposals of 1%. A new transparent system of performance bonuses is to replace the current arbitrary process and four more production staff are to be hired.

A deal that will should give the LVMH workers – as well as the well-heeled toilers in New York and London – a reason to pop the champagne.